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Costco prepares to launch car sales in NZ

NZ Herald,
Publish Date
Tue, 5 Dec 2023, 3:48PM

Costco prepares to launch car sales in NZ

NZ Herald,
Publish Date
Tue, 5 Dec 2023, 3:48PM

Costco Warehouse is said to be bringing discount vehicles to its New Zealand store after announcing its Australian car rollout earlier this year.

A spokesperson for the American retail giant told Stuff Costco Autoconnect would be coming to New Zealand but did not reveal details on when it will be available here.

The Herald has sought confirmation from Costco on its plans.

In Australia, Autoconnect is currently only available in Queensland, with plans to roll the service out across Victoria and NSW by the end of the year and other states in the new year.

Branded in the United States as “Costco Auto Program”, the retailer’s Australiasian arm introduced Autoconnect in Queensland, Australia this year through the website Autoreviewa, where Costco members can view new and used discounted cars and motorbikes.

Auckland's Costco store at Westgate. Photo / Jed Bradley
Auckland's Costco store at Westgate. Photo / Jed Bradley

After selecting a vehicle online, customers input their Costco member number and pay a fully refundable A$400 deposit before arranging for the car’s delivery or to pick it up from their local Costco.

Costco only has one store in New Zealand in Auckland’s Westgate, although there is talk of it opening a second branch in Christchurch. Customers have to pay a $60 annual membership fee to shop at the store.

In June, the Herald reported Costco Westgate had the lowest petrol prices in Auckland after the country rolled off the Government’s petrol subsidy, meaning a car offering could be a welcome addition to the retailer’s automotive range.

The company has not confirmed how many members it currently has in NZ, but the Herald reported in March that the NZ arm had celebrated a 150,000-member milestone.

The Westgate store marked its one-year anniversary this September, initially creating heavy traffic jams when it opened on September 28, 2022, with nearby shops posting signs banning shoppers from using their carparks to access the store.

Dave Hargreaves, who owns Mitre 10 Mega Westgate near Costco, said the announcement of the American big-box retailer initially received mixed responses from local retailers.

“Very early on, we expected Costco to bring more traffic to the area, which it has done,” Hargreaves said.

In February, the Herald reported that the $100 million-plus store recorded a bottom-line loss of $12.5m for the August year due to the business not being fully operational.

It had total revenue of $20m for the year to August 28, 2022.

That included money from the thousands of people who signed up for $60/year fees so they can purchase in the membership warehouse.

Cost of sales was recorded as $20.3m and general and administrative costs were put at $13.3m.

An operating loss of $13.2m was recorded for the year, although a change in fair value of financial assets was put at $484,000.

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